Now Reading:
Bitcoin Bulls Are Ignoring One Big Problem
Full Article 2 minutes read

Bitcoin Bulls Are Ignoring One Big Problem

Bitcoin and cryptocurrency bulls have cheered bitcoin’s more-or-less positive start to 2020, despite the rise coming off the back of a major escalation in tensions between the U.S. and Iran.

The bitcoin price, which limped through December following six months of declines, dropped below the psychological $7,000 per bitcoin mark early in the new year only to bounce back again a few hours later.

However, crypto analysts have warned bitcoin trading volume is now at its lowest since April, with volume down 90% from its June 2019 high—and when volume is low markets are more likely to make sudden, volatile moves.

bitcoin, bitcoin price, image
The bitcoin price has been on a steep downward trend for the past six months. Bitcoin bulls see the … [+]2018 Chesnot

“The seven-day average real trading volume continued downwards this week,” analysts at Arcane Research wrote this week.

“The first day of the year registered as little as $192 million in volume. These levels have not been seen since April 2019. Although this could be related to the holiday period and less activity during weekends, this is not a positive trend for the leading cryptocurrency in the space.”

The problem appears to be worsening with volume falling fast since bitcoin and crypto analysts warned over “dismal” bitcoin trading volumes in October last year.

Bitcoin’s volume spike earlier this year came as social media giant Facebook unveiled its planned libra cryptocurrency, with bitcoin trading volume still closely tied to media coverage of crypto.

Bitcoin trading volumes are now almost back to the level they were at the beginning of 2019—when the bitcoin price was under $4,000.

bitcoin, bitcoin price, chart
Bitcoin volumes are down to their lowest since April, causing researchers to wonder whether crypto … [+]Arcane Research

However, there are a number of upcoming dates in 2020 that could see bitcoin interest return to July levels, including the planned launch of Facebook’s libra cryptocurrency, crypto platform Bakkt’s Starbucks project, and bitcoin’s May halving event—when the number of new bitcoin rewarded to miners will be halved.

Input your search keywords and press Enter.